STATE BANK OF INDIA vs Sumitha Gopal Kurup on 18 June 2026

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated this the 18th day of June, 2026

TA No.1123/2016 (OA No.426/2012) Between

State Bank of India, Stressed Assets Recovery Branch, LHO Annex, LMS Compound, Thiruvananthapuram – 695 033.

…Applicant

And

Sumitha Gopal Kurup,

(Proprietress, Ananthapuri Bakers),

W/o.Rajesh,

TC 25/2568, Behind Ayurveda College, GPO, Thiruvananthapuram – 695 001. …Defendant

This Original Application having been heard on 08.06.2026 in the presence of Advocate Smt.Cicily George for the applicant bank and Advocate Sri.Mallenathan M., representing counsel for Advocate Sri.K.C.Eldho for the defendant and stood over to this day for consideration, the Tribunal delivered the following: F I N A L O R D E R

This Original Application has been filed under S.19(1) of the Recovery of Debts and Bankruptcy Act, 1993 (for short ‘the Act’) for recovery of a sum of Rs.10,00,083.57 due under the cash credit (hypothecation) account together with future interest thereon @14.75% per annum with monthly rests from the defendant and her assets. Facts of the case:

2. The applicant is a body corporate constituted under the State Bank of India Act, 1955 having its corporate centre at Mumbai and Stressed Assets Recovery Branch at Thiruvananthapuram.

3. The defendant approached the Statue Branch of the applicant bank seeking financial assistance for her bakery business. Considering her request, applicant bank sanctioned a cash credit (hypothecation) limit of Rs.5 lakhs on 25.05.2007. The defendant availed the loan after executing agreement of loan-cum-hypothecation on 25.05.2007. Thereafter, she committed default in repayment and the account became NPA. Hence the applicant issued a lawyer notice to the defendant on 10.02.2011 calling upon her to repay the outstanding dues but she did not clear the liability. In such premises, the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover the sum of Rs.10,00,083.57 together with pendente lite and post-decree interest thereon from the defendant and her assets;

(ii) To recover the costs, charges and expenses from the defendant;

(iii) To issue Recovery Certificate to the Recovery Officer with a direction to recover the amount and pay it to the applicant bank.

4. The defendant filed written statement contending inter alia that the actual amount due to the applicant bank is less than Rs.10 lakhs and hence the OA is liable to be dismissed. As the loan was availed on 25.05.2007, the claim is barred by limitation. The defendant did not execute the revival letter on 22.03.2010 as claimed by the applicant. The business conducted in the premises is covered by valid insurance coverage linked with the guarantee of Credit Guarantee Corporation of India and in the event of collapse of the business, the loan is to be reimbursed to the bank by the Credit Guarantee Corporation and the defendant is not liable to pay any amount. The applicant has debited excess amount towards interest and penal interest in the loan account. The OA is filed without any bonafides and hence the same is only to be dismissed.

Proof Affidavit:

5. In order to establish the claim on behalf of the applicant bank, one Mr.Joy Joseph and Mrs.Shiny John, Chief Managers of the bank have filed proof affidavit and additional proof affidavit respectively and produced the loan documents marked as Exhibits A1 to A8.

6. The defendant filed counter proof affidavit claiming that the applicant has debited an amount of Rs.346/- being the capitalized penal interest in the loan account and Rs.550/- towards fees which is against the agreement and hence illegal. Thus the total amount allegedly due to the applicant is less than Rs.10 lakhs and hence the OA is not maintainable before the Tribunal. The applicant is not entitled to recover the amount claimed in this case and the defendant is not liable to pay costs of this proceeding and it is prayed to dismiss the OA with costs.

7. Heard arguments advanced by the learned counsel appearing on either side and perused the records of this case. The sole issue arises for consideration is whether the applicant is entitled to recover the amount as claimed in this case?

8. Admittedly, the defendant availed the cash credit limit of Rs.5 lakhs from the applicant bank on 25.05.2007 and committed default in repayment. It is claimed by the defendant that at the time of availing the loan, the applicant obtained signature of defendant in several blank printed form and converted the same into a revival letter without the knowledge and consent of the defendant.

9. On perusal of records, it appears that cash credit (hypothecation) limit of Rs.5 lakhs was availed by the defendant as per Ext.A1 arrangement letter dated 25.05.2007 on the security of hypothecation of stocks and receivables. The rate of interest applicable at the time of availing the loan was 12.75% per annum with monthly rests. It is stated in clause 3 of Ext.A1 that the bank shall be entitled to charge enhanced interest rates for any irregularity including non-compliance of terms and conditions of the advance and the defendant has countersigned the arrangement letter marked as Ext.A1 in token of having accepted all the terms and conditions thereof. The defendant has executed agreement of loan-cum-hypothecation marked as Ext.A2 to secure the loan. Further, it could be seen that she had also executed revival letter dated 22.03.2010 marked as Ext.A3 acknowledging the liability under the loan account and due to default in repayment, the OA was filed on 27.08.2012 which is within the statutory period of limitation. The defendant did not produce any material to substantiate her contentions. On perusal of the documents, it appears that the security documents including the revival letter were validly executed by the defendant. The factum of availing the loan and execution of the revival letter would show that the applicant has a valid cause of action against the defendant.

10. It is contended by the learned counsel for the defendant that the applicant has debited a sum of Rs.342/- towards capitalized portion of the penal interest and Rs.550/- as other charges in the account and if these amounts are deducted from the OA claim, the outstanding amount will be less than Rs.10 lakhs and the Tribunal has no pecuniary jurisdiction to entertain the case.

11. S.2(g) of the Act defines the term ‘debt’ which means any liability (inclusive of interest) which is claimed as due from any person by a bank or financial institution. In the instant case, the applicant has claimed an amount of Rs.10,00,083.57 due as on 31.07.2012. No material is filed by the applicant to establish that at the time of presentation of OA in this Tribunal, the claim amount including interest and other charges is more than Rs.10,00,000/-. From the statement marked Ext.A8, it could be seen that as on the date of filing of the OA, the total claim under the cash credit (hypothecation) account is Rs.5,45,799/- and unapplied interest from 01.03.2008 to 31.07.2012 is Rs.4,32,711.16, in total Rs.9,78,510.16 (i.e., Rs.5,45,799/- + Rs.4,32,711.16), which is less than the pecuniary jurisdiction of the Tribunal.

12. Considering the same, the applicant bank is not entitled to get a final order from this Tribunal. The liberty is given to the applicant bank to recover the claim by filing fresh recovery proceeding in the competent court of law.

13. In the result and with the above observation, the OA being filed by the applicant bank in this Tribunal having no pecuniary jurisdiction, is hereby dismissed but in the circumstance without cost.

14. Communicate copy of this order to both parties as provided in R.16 r/w R.2(c) of the Debts Recovery Tribunal (Procedure) Rules, 1993. (Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 18th day of June, 2026)

[SOVAN KUMAR DASH]

A P P E N D I X Witness for Applicant: AW1: Sri.Joy Joseph, Chief Manager of the applicant bank. AW2: Smt.Shiny John, Chief Manager of the applicant bank.

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 25.05.2007 Letter of arrangement issued by the applicant bank. A2 25.05.2007 Agreement of loan-cum-hypothecation executed by the defendant. A3 22.03.2010 Revival letter executed by the defendant. A4 10.02.2011 Copy of lawyer notice issued to the defendant. A5 31.05.2012 Certified copy of the statement of account relating to the cash credit facility. A6 … Statement showing the unapplied interest due under Ext.A5 account till 31.05.2012. A7 … Statement showing the rate of interest applied in Ext.A5 account from time to time. A8 … Certified copy of the statement of account relating to the cash credit facility as on 31.07.2012.

Defendant’s Exhibits – Nil

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 18th June, 2026

TA No.1123/2016 (OA NO.426/2012)

Between

State Bank of India, Stressed Assets Recovery Branch, LHO Annex, LMS Compound, Thiruvananthapuram. …Applicant

And

Sumitha Gopal Kurup, (Proprietress, Ananthapuri Bakers), W/o.Rajesh, TC 25/2568, Behind Ayurveda College, GPO, Thiruvananthapuram. …Defendant

F I N A L O R D E R